Illinois has a multi-layered compliance structure that includes a Secretary of State annual report, a corporate franchise tax (now being phased out), and — for businesses in Chicago — additional city-level business registration requirements. This guide walks through each obligation for Illinois-registered entities.

Annual Report Filing

Every Illinois domestic and foreign corporation must file an Annual Report with the Secretary of State under 805 ILCS 5/14.05. The report is due by the first day of the corporation's anniversary month. Domestic corporations pay a minimum fee of $75 (varying based on paid-in capital). Foreign corporations pay $75. Illinois LLCs pay an annual fee when filing their annual report — $75 for domestic LLCs under 805 ILCS 180/50-10.

Late filing of an annual report results in dissolution after 60 days from the due date. Reinstatement requires paying back fees plus a $100 reinstatement fee.

Corporate Franchise Tax (Phase-Out)

Illinois historically imposed a corporate franchise tax under 805 ILCS 5/15.35 at 0.1% on paid-in capital, with a minimum of $25 and a maximum of $2,000,000. Illinois enacted legislation (P.A. 101-0008) to phase out the franchise tax, with full elimination effective January 1, 2024 for amounts over $1,000,000 and a partial credit for smaller amounts. For the 2025 filing year, corporations with franchise tax liability below $1,000 will owe nothing. However, the franchise tax line remains on the annual report form and must be completed.

Illinois Income Tax

Illinois imposes a flat 9.5% corporate income tax (combined state and personal property replacement tax) under 35 ILCS 5/201. The individual income tax rate is 4.95%. Pass-through entities (partnerships, S-corps, LLCs) pay a 1.5% Personal Property Replacement Tax (PPRT). Illinois income tax returns (Form IL-1120) are due by the 15th day of the 4th month following the close of the tax year (April 15 for calendar-year filers).

Chicago Business License

Businesses with a Chicago location or conducting business in Chicago must obtain a Chicago Business License from the City's Department of Business Affairs and Consumer Protection. The standard business license fee is $250 per year. Certain business categories (food service, liquor, healthcare) require additional specialty licenses. Chicago also requires businesses to collect Chicago's 1.25% home rule sales tax on top of state and county rates.

Foreign Qualification in Illinois

Out-of-state entities transacting business in Illinois must register as a foreign entity with the Secretary of State under 805 ILCS 5/13.05. The application fee for foreign corporations is $150; foreign LLCs pay $150 under 805 ILCS 180/45-5. Once registered, foreign entities are subject to Illinois annual report requirements and income tax obligations.

Illinois Employer Obligations

Illinois employers must register with the Illinois Department of Employment Security (IDES) and the Illinois Department of Revenue. IDES administers state unemployment insurance (SUI); returns are filed quarterly. Illinois also requires employers to withhold state income tax from employees' wages and remit via Form IL-501 (withholding payment). The Illinois Equal Pay Act (820 ILCS 112/10) requires all employers with 100+ Illinois employees to file an Equal Pay Registration Certificate with the Illinois Department of Labor, renewed every two years.

Key Deadlines

How Compliance Singularity Handles Illinois

Compliance Singularity tracks your Illinois anniversary date and files the annual report through the Illinois Secretary of State's online portal automatically. State income tax obligations are calendared and integrated with your accounting data. For Chicago-based entities, the system detects local license renewal requirements and queues them before the December 31 renewal deadline.